A New Option For SPX Traders? — Cboe Releases Additional S&P 500 Weekly Options

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In 2021, the market recorded over 9.78 billion options contracts traded, 32% above the 2020 record of 7.47 billion contracts and more than double the 9.8 billion in 2019.

This influx of options contracts might have been a spillover from the meme stock mania that catapulted GameStop Corp. GME and AMC Entertainment Holdings Inc. AMC to unprecedented heights, a frenzy that ultimately spewed both outrage and elation across Wall Street.

As the dust settles, some traders have said that the current options trading infrastructure isn’t built to their favor. Options are complicated. They can sometimes lack proper risk-management capabilities, and they hold too high a price for traders to routinely use them.

Cboe Global Markets Inc. CBOE seems to be on a mission to make the options infrastructure more accessible to traders and investors. Armed with an arsenal of market-defining products, Cboe has already released a string of new instruments – like Nano and Mini options – to spearhead this change.

Two new forms of Cboe’s S&P 500 WeeklySM SPXW Options will join this growing library of options products, allowing traders to engage in Tuesday and Thursday SPX Weeklys for the first time. 

What Are S&P 500 WeeklySM Options?

S&P 500 WeeklySM Options are index options that hold an expiration date that’s one week long.

These options can add greater flexibility and precision to a trader’s strategies by providing more targeted exposure to market opportunities.

SPX weeklys enjoy all the benefits of index options, including portfolio diversification, European style execution and potential tax benefits. An index option also theoretically grants its user higher liquidity and experiences fewer stock-specific fluctuations compared to a stock option. 

SPX weeklys also have intrinsic benefits. For example, they allow traders to target specific market events like elections and corporate earnings reports, and, unlike regular options contracts, they’re accessible nearly 24 hours a day, five days a week. Weeklys also hold much smaller time premiums compared to longer-lasting contracts, often resulting in more affordable prices.

With the addition of Tuesday and Thursday SPX Weeklys, Cboe will provide traders with an options contract for every day of the week.

You can learn more about SPX Weeklys and see if they are the right instrument for you here.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

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